Chevron in Ecuador

The archive of the Clean Up Ecuador campaign website

Chevron CEO Watson Again Keeps Analysts & Shareholders in the Dark Over $19 Billion Ecuador Liability

Amazon Defense Coalition

Amazon Defense Coalition
Contact: Karen Hinton at +1.703.798.3109

San Ramon, CA. – Chevron CEO John Watson continued his well-established pattern of misleading securities analysts and investors with a series of obfuscations and omissions when pressed on the "global theatre of operations" threatening the oil giant from its $19 billion Ecuador judgment during the company's 4th quarter earnings call.

Despite being questioned on global developments in the lawsuit by Evan Calio, an analyst with Morgan Stanley, Watson refused to address this week's appellate order from Argentina that maintained a freeze on $2 billion worth of company assets in the country. See here.  Chevron has previously indicated that the order could threaten its future investments in Argentina, unless the country's courts reversed the freeze. Chevron has recently committed $1 billion towards the development of the country's massive shale gas reserves.

In fact, Watson concealed mention of any negative developments for the company in the lawsuit and was forced to reach all the way back to a controversial interim arbitration award from February 2011 for evidence of any ruling in Chevron's favor.

Watson also refused to correct Calio's inferences about recent bribery allegations in the case that surfaced earlier this week.  Watson knew full well that the paid Chevron witness in question was a disgraced ex-judge who had only presided over the case for nine months in 2003 but addressed Calio's questions as if he were the judge who issued the final judgment.

While downplaying the risks from the Ecuador lawsuit, Watson was keen to promote the company's new massive investment in the Kitimat LNG facility in British Columbia.  However, Watson failed to mention that the entire investment could be subject to seizure if the Ecuador judgment is recognized in Canada, a process that has been underway since last May.

 "John Watson may think he can keep his shareholders in the dark over this case, but the lights are coming on," said Graham Erion, a securities lawyer advising the rainforest communities in Ecuador and author of a recent report on Chevron's misleading public disclosure of the lawsuit.   

"Chevron's shareholders will not tolerate management's deceit on this enormous liability," Erion added, "Watson's refusal to reveal this liability is possibly a violation of securities law and will serve to aggravate growing dissent among shareholders about the way he has handled the litigation."

Watson's tactics today reflect a growing hostility of Chevron's management to its shareholders over this lawsuit.  Under Watson's direction, Chevron launched an unprecedented attack to try to silence its own shareholder critics with a series of subpoenas and ethics complaints against investors who supported past resolutions on the case.